IT had been hinted at for some days, so it's not entirely correct to deem yesterday's announcement from Frankfurt as a surprise. But prior to last week, further rate cuts from the European Central Bank (ECB) were all but written off.

IT had been hinted at for some days, so it's not entirely correct to deem yesterday's announcement from Frankfurt as a surprise. But prior to last week, further rate cuts from the European Central Bank (ECB) were all but written off.

Troubled economies had been showing signs of stabilising, the crisis enveloping the eurozone had subsided, compared to where we were 18 months ago, and the bank's main borrowing rate was at a record low.

But that was last week. This week, we saw signs that the tentative recovery may already be faltering, with the European Commission cutting its growth forecasts, coupled with negative data on retail sales.

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